Contrary to what you may be seeing on the news, not all businesses have been affected by the current “Pandemic” economy. Many franchises do well in both up or down economic climates. If you’ve thought about owning your own business but have been waiting for the economy to improve, you may be “missing the boat.” There are many advantages to buying a franchise business today.
Here are four reasons why it’s a great time to buy a franchise:
1. You’ll have your pick of good employees.
Unemployment has created a vast pool of people, as the jobs they used have could be eliminated. What does this mean for you? It indicates that good employees are plentiful, and you should be able to find and retain great people to help you start and grow your business. Whether your new franchise requires IT, marketing, sales, or skilled labor positions, you’ll have more people to choose from as the economy moves forward. Even better, you’ll be creating jobs and helping your community!
2. Interest rates are low.
Borrowing could not be better for the money you want or need. You’ll need to have some cash in hand to buy a franchise, but many business owners borrow a portion of the amount required to obtain a franchise. Just don’t expect to get these rates if your credit rating is poor. You’ll need a credit score of at least 680- 700 to qualify. If you are ready to become a business owner, don’t wait for rates to rise. A low-interest rate will mean more money in your pocket.
3. Money is available
Many financial institutions recognize that a franchise purchase is a “safe” investment. While start-up businesses are deemed risky, many financial institutions know that franchising has a good record of success. Therefore, even in a weak economy, banks are willing to provide loans for franchise investments. If you need help finding a bank that specializes in franchise lending, contact a franchise financing company – they can assist you in researching a variety of options.
Some of the reasons that buying a franchise is considered a safer investment than a start-up include:
- A well-tested business model;
- Comprehensive operations manual;
- Thorough initial training;
- A company dedicated to the success of the franchisee;
- Mandatory marketing program ensuring adequate national advertising;
- Brand recognition; and
- Ongoing support and training.
4. Real Estate will be plentiful
If Retail is the path you choose. Landlords will want to make sweet deals as they need their space filled. Franchisors will be very receptive to terms for opening. You’ll find lots of business property available and at reasonable prices. Right now, it’s a buyer’s market, but as the demand for space increases, so will the cost. If you find a reasonable price in a good location, act quickly. Your franchisor should be able to help you choose which property and location will be best for you. However, you may also want to hire someone to check out the terms of your purchase or rental agreement to ensure you are getting the best deal possible.
If you genuinely want to be your own boss, steer your own course and take control of your career, this is an excellent time to buy a business, particularly if you invest in a solid franchise with excellent training and support.
Tips for Buying a Franchise:
- Pick a recession-resistant business.
- Look for one with a low start-up cost.
- If your credit isn’t great, clean it up now – you’ll need good credit to qualify for a loan.
- Don’t discount service businesses because they aren’t “sexy.” They are among the best values among franchises because of their lower entry cost, high demand, and good margins.
- Stay within your budget. One of the main reasons for failure of a franchise is being under-capitalized.
- Your best source of information about a franchise opportunity is the existing franchisees. Use this resource wisely, and you’ll get a good sense of the overall business.
- Choose carefully. Unlike a job, which you can change at will, you’ll need to stick with your franchise purchase to fully appreciate the return on your investment.
Ready to take the next step to learn more about the possibilities of owning your own business? Schedule a call with me!
